Conformed Copy - C2040 - Rural Finance Project - Amendment 1

Page 1 September 19, 1991 PNDC Secretary for Finance and Economic Planning Ministry of Finance and Economic Plan P.O. Box M 40 Accra, Ghana The Governor Bank of Ghana P.O. Box 2674 Accra, Ghana Dear Sirs: Credit No. 2040 GH (Rural Finance Project) Amendment of Development Credit and Project Agreements Please refer to: (i) the Development Credit Agreement (Rural Finance Project) dated July 28, 1989 between the Republic of Ghana and the International Development Association (the Association), (ii) the Project Agreement (Rural Finance Project) of same date between the Association and the Bank of Ghana, and (iii) the letter from the Ministry of Finance and Economic Planning dated July 23, 1991 requesting amendments to the Development Credit and Project Agreements. The Association after considering the request and reasons for amendment hereby proposes that the Agreements referred to above be amended as follows: (A) Development Credit Agreement 1. In Section 1.02, by the addition next after definition (n) of the following new definition: (nn) "ARB" means the Association of Rural Banks established and operating under the laws of the Borrower;. 2. In Schedule 1, by the deletion in paragraph 1 of the table of withdrawal of proceeds of the Credit and the substitution therefor of the following new table: " Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent to be financed (1) Sub-loans 11,350,000 80% (2) Consultants' 2,086,000 100% Services and Training (3) Equipment and 496,000 100% vehicles (3A) Civil Works 114,000 100% of foreign expenditures and 95% of local expenditures (4) Operating costs: (a) RFD 230,000) 80% (b) ARB 114,000) (5) Refunding of 20,064 Amount due Project pursuant to Page 2 Preparation Section 2.02(c) Advance of this Agreement (6) Unallocated 807,936 TOTAL 15,200,000 3. In Schedule 2, by the deletion of the provisions in Part D.1 and the substitution therefor of the following new provisions: "1. Support of the Association of Rural Banks (ARB), the Ghana Cooperative Credit Union Association (GCCUA) and the Susu Groups through the provision (i) of equipment, vehicles and training to ARB, GCCUA and the Susu Groups, and (ii) of office building (including construction) to ARB." B. Project Agreement 1. In Section 2.04, by the deletion of the words "goods and consultants' services" occurring therein and the substitution therefor of the words "goods, works and consultants' services". 2. In Schedule 1, by the deletion in Part A of sub-paragraph (a) of paragraph 2 and the substitution therefor of the following new sub-paragraph: 2. Interest Rates (a) Interest on a PFI Subsidiary Loan shall be charged on the principal amount thereof outstanding from time to time at two percentage points below a reference interest rate which shall be based on the average cost of 180-day deposits mobilized by PFIs (the Reference Interest Rate)." 4. In Schedule 3, by the deletion of Part A of Section I and the substitution therefor of the following new Part: "Part A: Procurement of Goods and Works 1. Except as provided in paragraphs 2 and 3 below, goods and works shall be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Goods estimated to cost less than $50,000 equivalent per contract may be procured under contracts awarded on the basis of comparison of price quotations obtained from a list of at least three suppliers from at least two different countries eligible under the Guidelines, in accordance with procedures satisfactory to the Association. 3. Works estimated to cost less than $50,000 equivalent per contract may be procured under contracts awarded on the basis of comparison of bids obtained from a list of at least three bidders eligible under the Guidelines, in accordance with procedures satisfactory to the Association." 5. Kindly indicate your agreement to the amendments proposed above by signing the form of confirmation on this letter agreement and the two accompanying counterparts thereof, each of which shall be an original and all collectively but one instrument. The letter when signed by you shall be deemed to have come into force as of July 1, 1991. Very truly yours, Edwin R. Lim Director Western Africa Department Page 3 CONFIRMED: REPUBLIC OF GHANA By: Authorized Representative BANK OF GHANA By: Authorized Representative